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Labor Market Emergence and Returns to Education in Rural China

Author

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  • Qiang Li
  • Alan de Brauw
  • Scott Rozelle
  • Linxiu Zhang

Abstract

This paper examines the emergence of labour markets in China through the lens of returns to rural education. It demonstrates that methodology plays an important role in explaining the low estimates of returns in previous studies. When wages are defined on an hourly basis and sample selectivity is controlled, estimated rates of return rise. In addition, using data on households (n=1199) followed over 15 years (1988-2002), the paper shows that returns have risen over time. Finally, using households from the same community, it is shown that the returns rise even more when the sample includes workers with demographic and employment profiles more like those in the rest of the world (i.e., young and working in urban areas). In fact, the paper finds that the returns to education are close to 10% for young wage earners. When looked at in total, the results show that the returns to rural education in China are completely consistent with other developing countries. Finally, these results indicate that China's labour markets are becoming more functional over time.
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Suggested Citation

  • Qiang Li & Alan de Brauw & Scott Rozelle & Linxiu Zhang, 2005. "Labor Market Emergence and Returns to Education in Rural China ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(3), pages 418-424.
  • Handle: RePEc:oup:revage:v:27:y:2005:i:3:p:418-424
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2005.00238.x
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    References listed on IDEAS

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    1. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    2. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, December.
    3. Jacob A. Mincer, 1974. "Age and Experience Profiles of Earnings," NBER Chapters,in: Schooling, Experience, and Earnings, pages 64-82 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Anderson, Kym & Strutt, Anna, 2014. "Food security policy options for China: Lessons from other countries," Food Policy, Elsevier, vol. 49(P1), pages 50-58.
    2. repec:eme:caerpp:caer-10-2017-0196 is not listed on IDEAS
    3. Kym Anderson, 2018. "From taxing to subsidizing farmers in China post-1978," China Agricultural Economic Review, Emerald Group Publishing, vol. 10(1), pages 36-47, February.
    4. Ge, Suqin & Yang, Dennis Tao, 2011. "Labor market developments in China: A neoclassical view," China Economic Review, Elsevier, vol. 22(4), pages 611-625.
    5. Glauben, Thomas & Herzfeld, Thomas & Wang, Xiaobing, 2008. "Labor market participation of Chinese agricultural households: Empirical evidence from Zhejiang province," Food Policy, Elsevier, vol. 33(4), pages 329-340, August.

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